Everyone says buying is always better.
But is it really?<\/p>\n\n\n\n
THE CASE FOR BUYING:<\/p>\n\n\n\n
Advantages:
\u2192 Building equity (not paying landlord)
\u2192 Mortgage interest tax deduction
\u2192 Property value appreciation
\u2192 Stability \u2014 no landlord can evict you
\u2192 Freedom to renovate and customize
\u2192 Fixed mortgage payment (no rent increases)<\/p>\n\n\n\n
Best if:
\u2192 Planning to stay 5+ years
\u2192 Have 10-20% down payment
\u2192 Stable income and job
\u2192 Good credit score (700+)
\u2192 Local market is reasonably priced<\/p>\n\n\n\n
THE CASE FOR RENTING:<\/p>\n\n\n\n
Advantages:
\u2192 Flexibility to move for better job
\u2192 No maintenance costs (landlord pays)
\u2192 No property tax
\u2192 No HOA fees
\u2192 Can invest down payment in market instead
\u2192 Less financial risk<\/p>\n\n\n\n
Best if:
\u2192 Might move in next 3-5 years
\u2192 Live in very expensive market
\u2192 Don’t have down payment saved
\u2192 Job or income is unstable<\/p>\n\n\n\n
THE REAL NUMBERS:<\/p>\n\n\n\n
$400,000 home purchase:
\u2192 Down payment (10%): $40,000
\u2192 Monthly mortgage: $2,400
\u2192 Property tax: $400\/month
\u2192 Insurance: $150\/month
\u2192 Maintenance: $300\/month
\u2192 Total monthly cost: $3,250<\/p>\n\n\n\n
Renting equivalent home:
\u2192 Rent: $2,200\/month
\u2192 Savings: $1,050\/month<\/p>\n\n\n\n
If you invest $1,050 difference + $40,000
down payment at 10% return for 10 years:
= $385,000 invested!<\/p>\n\n\n\n
Home appreciation over 10 years (4%\/year):
$400,000 \u2192 $592,000
Minus mortgage balance \u2192 $120,000 equity<\/p>\n\n\n\n
VERDICT:
In expensive markets \u2192 Renting + Investing wins
In affordable markets \u2192 Buying can win<\/p>\n\n\n\n
Run the numbers for YOUR city!
Use New York Times rent vs buy calculator
(search: NYT rent vs buy calculator) 🏠<\/p>\n","protected":false},"excerpt":{"rendered":"
Everyone says buying is always better.But is it really? THE CASE FOR BUYING: Advantages:\u2192 Building equity (not paying landlord)\u2192 Mortgage interest tax deduction\u2192 Property value appreciation\u2192 Stability \u2014 no landlord can evict you\u2192 Freedom to renovate and customize\u2192 Fixed mortgage payment (no rent increases) Best if:\u2192 Planning to stay 5+ years\u2192 Have 10-20% down payment\u2192 … <\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15],"tags":[],"class_list":["post-122","post","type-post","status-publish","format-standard","hentry","category-mortgage-home-buying","grid-sizer"],"_links":{"self":[{"href":"https:\/\/getrichunder30.com\/index.php?rest_route=\/wp\/v2\/posts\/122","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/getrichunder30.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/getrichunder30.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/getrichunder30.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/getrichunder30.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=122"}],"version-history":[{"count":1,"href":"https:\/\/getrichunder30.com\/index.php?rest_route=\/wp\/v2\/posts\/122\/revisions"}],"predecessor-version":[{"id":123,"href":"https:\/\/getrichunder30.com\/index.php?rest_route=\/wp\/v2\/posts\/122\/revisions\/123"}],"wp:attachment":[{"href":"https:\/\/getrichunder30.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=122"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/getrichunder30.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=122"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/getrichunder30.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=122"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}